Stages and dynamics
of European
integration
The EEC represents a new form of integration in the history of capitalism. There is certainly no comparison with the kinds of integration that led in the past to the formation of national states. But it does represent more than a simple customs or commercial union because EEC institutions and integrated policies have emerged. In fact it is a kind of integration of different states. True, it is partial and unfinished, but the dynamic is very significant at different levels: • The EEC represents a framework which has a strong influence on the social and economic policies of the member states. This was graphically illustrated when the 1983 Mauroy government chose to step up its austerity policy, partly in order to keep in the European Monetary System (EMS). • More fundamentally, the EEC shows how strong the post-1950s internationalization of production has been. Certainly internationalization is not a new characteristic of capitalism or of the commercial system which preceded industrialization. Today it has a qualitatively different dimension from the past. It goes well beyond the international circulation of commodities. Now we have a thoroughgoing internationalization of production itself, of capital, corporate strategy and the regulatory (or in fact often destabilizing) monetary and financial mechanisms of the business cycle.
8 International Marxist Review
Marxists who want to work for a revival of socialism should intervene and develop an analysis in relation to the EEC since it has established a new political space. On one hand, because a number of demands are only really coherent in the framework of an international struggle (the 35-hour week for instance). On the other hand, because the EEC provides an arena for the political recomposition of forces looking for an alternative to capitalist and bureaucratic models of society. This political arena is already marked by:
• a crisis of the Western communist parties specifically linked to the economic and political existence of the Common Market;
• the emergence of debate on the left of the social democratic parties;
• the development of social, peace and green movements and their impact on politics;
• trade union struggles that challenge the dominant economic logic;
• finally organizations that came out of the extreme left which maintain a capacity for political initiatives.
Of course, we must not be imprisoned by this space and we should see its limits. The recomposition is not limited to the EEC and it must not be constrained by it. Such processes exist in other European countries and in any case freedom struggles in Eastern Europe and solidarity with Third World peoples are necessary and fundamental dimensions of this recomposition. Nevertheless the EEC remains a framework of action and debate for a possible recomposition. Political forces that get involved will not be able to avoid such a recomposition. Not only because it must be the space for common political campaigns but also because the definition of any credible new project for socialism can only be achieved with reference to the stage reached by the internationalization of the capital. The origins of the European Community The conditions for the birth of Europe A series of economic and political factors and the international situation explain the birth of the European Community.
Europe came out of the Second World War devastated in certain areas. The economic influence of the United States was considerable. American industry was boosted by the war while the country was saved any destruction. American banks and financial institutions provided most of the credit to the rest of the world. The United States played the card of European reconstruction for political reasons but also for economic ones. The American establishment understood its interest in developing export markets and expanding interna-
Stages and dynamics of European integration 9 tional trade. The Marshall Plan led to the formation of the Economic Commission for Europe which became later the European Organization of Economic Cooperation (the forerunner of the OED), which represented a first framework of negotiation for post-war European economic organization. Several forces pushed politically for the building of Europe. For Germany this was the only way to detach itself from the regime of supervision that continued up to 1950. France was opposed initially to German "emancipation" but quickly understood it was better to position itself as the pivot of an eventual Europe rather than risking isolation in the face of an independent German recovery or an alliance between West Germany and the USA. The necessity for the common management of the French-occupied Sarre's coal and iron resources was the embryo of the future ECSC (European Coal and Steel Community).
Finally, the international situation precipitated events. Once Eastern Europe passed over to the Soviet sphere of influence, Western governments sought an alliance. Cold war tensions, particularly the Korean War, contributed at the beginning of the 1950s to the setting up of an Atlantic bloc.
None of these elements predetermined the precise form and content of European integration which led to the creation of the EEC by the signing of the Treaty of Rome in 1957 between West Germany, France, Italy, Holland, Belgium and Luxembourg.
The originality of the EEC was that it went beyond the stage of a customs union, it established the basis for common policies, and the building of plurinational institutions.
The customs union was certainly the first platform. It involved the abolition of custom duties between member states combined with the setting of common tariff barriers for goods coming in from non-member countries. This was the tangible sign of the European leadership's will to achieve quickly (it took 9 years) the founding free trade principle of the "Common Market".
Developing integrated Community policies represented a second stage. In fact it was initially mainly about the CAP (Common Agricultural Policy). The reasons were both political and economic. Politically the building of Europe was at first linked to interstate compromises and in particular the Franco-German axis. France wanted to compensate for her disadvantages faced with West German industrial dynamism by dominating European agricultural markets. This required the introduction of the free circulation of agricultural products even while the initial price levels varied greatly and were largely dependent on national mechanisms of market support since agriculture was a sector of strong state intervention. In fact a free market necessitated a policy of
10 International Marxist Review common prices and consequently common organization of the markets. This became tremendously complicated due to the influence of farming lobbies, particularly the best organized ones. In this framework the big French farmers, mainly producers of exported cereals, asked for a relatively high price policy. The German Christian Democrat leaders, whose electoral base included the peasantry, rapidly came to an agreement on this.
Finally, the third element was represented by an original development of institutions spanning the European Council (heads of state of government or their ministers), the European Commission, Parliament and Court of Justice. The Council is the true instrument of political decision-making, but the Commission, the executive, rapidly acquired a far from negligible role of arbitration and initiative. It was not the same for the European Parliament, conceived from the start as a debating and consultative body without real power.
In fact the forms of the EEC institutions are a good expression of this interstate character of the building of Europe.
But its dynamic must also be related to the fundamental tendencies of postwar capitalism. Forms of internationalization If we can talk about a deepgoing trend of late capitalism it is certainly internationalization. Not only does it involve the expansion of markets and the circulation of commodities but it is also based on a more fundamental logic of a productive system which is founded on the structural imperatives of capital accumulation and profit making:
• the need for a direct presence of companies in "foreign" markets in order to bypass forms of monopolistic or oligopolistic competition; • the drive for minimum production costs; • utilization of the different phases of the industrial productive cycle;
• bypassing custom barriers; • the growth of international banks with at the same time the break up of fixed commission rates; • the explosive growth of Euromoney (Ecu) ; • more recently financial deregulation and the multiplication of international credit and loan mechanisms, etc. Increasingly in practice the national arena has proved to be inadequate for the needs of capital. Mandel in Late Capitalism defined this phase as the transition from a situation dominated by the international concentration of capital, a feature of "classical" imperialism, to a situation characterized by the international centralization of capital.
Inter-capitalist competition can only operate in this framework. It no longer functions fundamentally through domination of colonies or by control of raw materials but it develops in the very heart of the main capitalist centres and affects all aspects of the capitalist economic process: costs, but also industrial policies, controlling vertical integration, technological innovation, monetary
Since the end of the 1950s this competition has not resulted in the complete homogenization of national economic systems nor in the emergence of a
"super-imperialism" representing the hegemony of a single state but rather by new powers coming into a dominant position on a continental level. The rise of Japan as a major power is one example of this but so too is the EEC although in a very different context. The EEC has been the form used by European capitalist powers to go beyond national limits to capitalist development and to compete on a world stage. But the national states are still important since the dynamic of internationalization does not mean the disappearance of states. Not only because they have a key role in the "management" of social order and are both the objective for, and intervene in, the class struggle but also because the post-war boom was entirely related to state economic policies. The state's economic role increased greatly during that phase of growth whether we look at the administration of incomes policies, fiscal policies, spending budgets or the many varied forms of economic intervention in com-
We have to understand the EEC in this framework as a form of real but partial integration, characterized by its inter-state relations. This integration is
1958
World
34,667
12,905
Europe (12)
Non-Europe
1980
World
Europe (12)
Non-Europe and financial mechanisms etc.
panies or business sectors.
1960 1965
43,233
66,400
32,907
17,660
21,742 25,554
33,492
1982
1981
497,137 571,054 626,652
276,893 301,542 338,297
216,670 265,349 284,069 300,621 350,859 378,651
Stages and dynamics of European integration 11
Table 1
Evolution of Community exports
(in millions of Ecus)
1970
1975
1977
249,184
116,157
61,979
130,621
118,530
54,178
1984
1985
1983
776,772
671,884
466,595
366,885 421,709
Source: Eurostat
1978
1979
345,947
374,530 437,602
185,248
203,423 247,264
171,083 190,309
160,652
1986
806,958
849,936
461,342
341,934
12 International Marxist Review still partial since it has not led to a complete homogenization of the European economy nor to the emergence of a European state with real state powers. Its inter-state character is shown by the maintenance of hard national bargaining during each crisis or advance in building the EEC. Nevertheless this integration has gone forward. We will come back later to the lessons of the post1975 crisis, here we will point out some of the features of the 1960-75 period.
In this period the EEC's economic integration deepened. Of course this only had a relative impact on the structures of European companies since at that time European centralization of capital was still weak. However commercial integration proceeded apace. Thus in 1958 exports outside the Community represented 64% of the total exports of the 12 EEC countries, but by 1975 this had fallen to 48% as can be seen in Table 1.
At the same time the specific role of EEC institutions developed. They took on a certain autonomy. Although this was relative it meant that they were not a simple instrument of national governments. Even if they are still subjected to bargaining and horse trading by the different states these institutions have acquired, in certain domains, a capacity for taking initiatives which has been subsequently seen in the development of new EEC policies.
There was an extension of European integration in this period because at the end of the day, it was proved to be positive for the different capitalist states. The benefits of EEC development have indeed been shared, relatively speaking, by all member states and in any case appear greater than the costs. Furthermore this explains why the EEC was extended to three other countries at the beginning of the 1970s, to Denmark, Ireland and Great Britain. This is quite logical in a phase of growth, where the expansion of markets are seen as a dynamic factor for each member's national economy. While on the other hand the constraints of EEC rules seemed rather modest.
The crisis ought to have altered this situation. The slowdown in growth and the heightened competition ought to have damaged the dynamic of Community integration — producing confrontations between states, fostering protectionist reflexes, accentuating differences between national economic policies or indeed bringing about political crises in member states. Some observers even forecast the disintegration of the EEC declaring that it was a product of the boom but that the crisis would be its death knell by causing such an explosion of tensions and imbalances within and between the European economies that the EEC itself would not survive. This forecast up to now has been proved incorrect. Far from disintegrating the EE has further developed. Certainly in an often chaotic process influenced by the crisis but this general
The crisis and development of European integration
First it is useful to briefly examine EEC development in relation to the other two main capitalist blocs — the USA and Japan. Many commentators in recent years have talked about a decline of the EEC relative to the USA and
In fact reality is much more complex. Of course it has never been easy to evaluate the relative ranking of states in international competition. You have to arrive at it after analyzing a complicated series of factors concerning economic growth but also questions such as technological dynamism, monetary strength, military and political relationships of forces etc.... You can demonstrate more or less what you want by selectively choosing your data.
• However the most all-embracing data for growth is changes in per capita
Since the beginning of the 1960s Japanese growth has been strong, EEC growth more modest but above US levels. In recent years there have been signs of a change in trendwith US growth higher than the EEC's. This change is probably temporary since it is based on a high trade deficit and a strong surge in the country's overall debt which must eat away economic stability.
Data for industrial performance widens the gap. From 1960-1985 Japanese industrial growth was nearly double that of the EEC which in turn was nearly double that of the USA. This is a sign of a change in the world's industrial
Stages and dynamics of European integration 13 trend to further integration has not been reversed.
The EEC versus the USA and Japan
Japan.
real Gross Domestic Product (GDP).
- Table 2
GDP per capita
(average annual rate)
60-68 68-73 73-79 79-85
60-85
2.1
1.4
2.1
USA
3.1
1.4
5.7
2.5
3.5
9.3
6.8
Japan
2.7
3.7
4.2
2.0
1.0
EEC
Source: OCDE
(See Table 3.)
83
3.0
2.5
1.2
84
5.7
4.3
2.0
85
2.1
2.9
2.1
hierarchy resulting from the "logical" effects of catching up and the changes in
• Trading strengths/positions - data about the proportion of exports in
GDP shows a very uneven involvement in world trade. Thus in 1985 exports represented 32.5% of EEC GDP, 15% of Japanese GDP and only 7% of US
GDP. Since 1960 Japanese exports have grown a great deal, the EEC comes quite a way behind although higher than the USA. On this criteria the American economy is less competitive than its main competitors.
• Changes in the share of world exports (excluding inter-EEC trade) further confirms the worsening of the USA's position with Japan mainly profiting from it. The latter's share of world exports is now more or less the same. (See
• Rates of unemployment — this shows a different picture. Unemployment remains low in Japan which is due to the specific forms of recruitment
14 International Marxist Review
USA
2.5
Japan
8.8
EEC
4.6 relative competitiveness.
USA
Japan
EEC
Table 5.)
60-68 68-73 73-79 79-85
1.7
-0.1
8.8
3.5
4.6
2.4
68-73
60-68
4.9
14.7
7.7
Table 3
Industrial GDP per capita
(average annual rate)
60-85
2.2
1.7
4.4
6.4
2.7
3.6
Source: OCDE
Table 4
Exports of goods and services
(rate of volume growth)
73-79
9.4
5.0
12.3
8.9
7.8
4.3
Source: OCDE
83 84 85
5.2 3.4 2.7
2.6 7.4 6.1
4.3 4.3 3.4 79-85 60-85
1.0 4.8
10.1 11.7
5.2 6.3
and management of labour, its strong growth rate and to small increases in the size of the working population. Up to the end of the 1970s unemployment was higher in the USA than in the EEC. Since then the positions have reversed. Stagnation in employment in the EEC has given way to an absolute decline while new jobs have been created in the USA but these are often part- time and/or temporary unskilled jobs without decent statutory protection.
• Ranking in terms of technological strengths depends on the sector. European industry is still strong in transport, energy, chemicals, and telecommunications. On the other hand it is definitely behind the USA and Japan in the most innovative sectors of information /computer technology, robots and bio-
• As for the strength of the various currencies the decline of the American
"empire" has to be underlined. This decline has been underway for some time now. The first signs were the ending of dollar-gold convertibility in 1971 and of fixed parities in 1973. It reflected a growing US trade deficit and especially an accumulation of dollar debts. After the artificial rise in the dollar from 1980 to 1984 there was a new pressure for it to fall. The weakness of the dollar is directly tied to the structural deficits of the US economy and is a sign of its
What are then the main features of the overall balance sheet of the last 25 years? On the economic level there has been a relative weakening of the US position, an undeniable strengthening of Japan's and a more uneven performance from the EEC. The latter has been more dynamic in its growth over the whole period than the USA but it is still behind in certain technological sectors and is above all without equivalent military and diplomatic power on a world scale. In fact, over and above merely registering data indicating varying rankings, we can accept that there is a crisis of hegemony in the capitalist world. No state and no bloc is really coming forward as the dynamic force in technologies.
loss of competitiveness.
1960
1970
1980
1986
EEC
23.1
21.5
18.7
19.8
Stages and dynamics of European integration 15
Table 5
World exports (%)
USA
18.4
17.2
13.7
12.8
Source: Eurostat
Japan
3.7
7.7
8.1
12.4
16 International Marxist Review any new hegemony, capable of imposing its way over all the main capitalist powers. None of the three main capitalist poles possesses the necessary combination of commercial, monetary, technological and military power to achieve that.
But it is precisely this absence of hegemony which opens a space for European integration. The USA is no longer able to impose its rules and the shifting of the burden of its deficit onto competing economies is likely to be increasingly onerous. This is one reason for West Germany's EEC policy. It cannot politically do without the EEC and in the hypothesis of a big American recession would be the first hit. In the same way the USA's decline explains Britain's choice of anchoring itself in the EEC, an option that was very much contested in the 1970s by certain sectors of the British bourgeoisie. We could add that the changes underway in the Soviet Union are also likely to work in favour of EEC development, if further disarmament negotiations lead to European involvement in these discussions. At another level the Soviet Union could seek long term commercial and technological agreements with the EEC. The basis for such a development already seems to exist today. The crisis and Europe Not only has the crisis not led to a disintegration of the EEC but on the contrary there has been an increased degree of integration in the economic and financial areas, community policies and the political and institutional domain. Closer economic and financial integration Commercial integration was already strong but has gone further still since 1975. Thus between 1975 and 1986 inter-European exports (with a 12 member EEC) has increased 3 times while external EEC exports have gone up 2.9 times. This reflects, at least partially, the effects of the specialization and complementarity of the national economies of member countries in terms of their strengths in different industrial and business sectors.
Furthermore a process of monetary integration is well underway with the establishment of the European Monetary System (EMS) at the end of the 1970s. From the beginning it was an initiative where the technical and political aspects were closely linked.
The declared objective is to limit the fluctuations in the exchange rate between European currencies and the impact of floating rates (that of the dollar
Stages and dynamics of European integration 17 in particular in a period when it became erratic on European exchange rates. But what lay behind it all was the developing Franco-German axis. France wanted to benefit from the Bundesbank's reserves to support the franc at a time when the Barre government was committed to an austerity policy founded on keeping a strong franc. West Germany accepted this since it helps impose its own economic options on a European scale. National economic policies have to stay within the limits of EMS parities which effectively prevents any policy of national economic recovery plans. But the European monetary unit, the Ecu, was far from being real money when it was created. Certainly it is an accounting unit but it is not a unit of payment and it is a false unit of currency reserves since accounts in Ecus held by member states are only duplicate deposits for a part of the national currency and gold reserves. The Ecu's role has certainly increased but mainly under the form of the private Ecu. In certain cases this has become a unit of payment (often between national subsidiaries of the same multinational), or a loan and credit unit to the extent that it permits the operators concerned to cover themselves against the risks involved in the continuing monetary instability. But essentially the Ecu still does not have the features of a real currency. There is still not a real network of payments in Ecus nor even general arrangements for settling accounts between central banks. Hence the frequent pleas from various quarters (liberals, Keynesians, but also from economists coming from the Marxist tradition) in favour of promoting the Ecu's role in order to arrive at a European currency. The arguments made in its favour are the need: • to stabilize inter-community trade faced with the threats of the unhinging of world trade;
• to disconnect inter-community interest rates from US interest rates which are under pressure to rise because of US deficits; • and to replace the market led dominance of euro-dollars with a new integration through the Ecu.
According to these enthusiasts the solution must be to increase the role of the private Ecu and progressively bring together the official Ecu and the private Ecu or by the setting up of a European central bank. It is not the aim of this article to discuss the possibilities or schedule for the realization of such a perspective. We should only note that the hypothesis of a European central bank, existing alongside the national central banks, is today credible. It would manage much greater currency reserves than at present, extending the role of the Ecu as an accounting lending and borrowing unit and deploying funds in function of the needs of an integrated monetary policy. This would not necessarily mean the disappearance of national currencies as a unit of payment.
18 International Marxist Review Coexistence can be maintained once there is an integration of monetary policies and financial markets. There is already more or less integrated financial markets and monetary policies are going along the same lines — mainly as a consequence of common neo-liberal policies. Britain is still hostile to this option and its currency does not participate in the EMS. West Germany is still cautious. Although it generally benefits from the EMS it does not yet want to get involved in operations that might dramatically increase money supply. But positions can change very quickly in this debate.
Finally we must emphasize that monetary policies are never neutral. A socialist Europe would have to build a "monetary shield" ", particularly against the dollar and develop rates of interest independent of world market pressures. But the present logic of the situation is quite different. What is happening is growing monetary integration within the framework of neo-liberal policies which increasingly has recessionary effects by imposing competitive policies based on the reduction of costs and the squeezing of domestic demand. Consequently monetary policy becomes a factor worsening these recessional effects by limiting any margin of manoeuvre in terms of investment priorities or controlling capital markets (which become a purely financial market). Championing the EMS and its further development ignores the fundamental question - the social character and content of economic policies in Europe. The strengthening of Community policies Since the 1970s EEC policies have developed in various domains but in an uneven way: • The CAP has been maintained and even its fields of intervention extended during the 1970s despite repeated tensions due to :
• sectoral market crises,
• inter-state conflicts linked to the influx of goods that throw domestic markets off-balance,
• monetary perturbations due to exchange rate variations which the compensation funds are supposed to moderate but in fact do so to the advantage of strong currency countries.!
However, it went into crisis at the beginning of the 1980s with growing surpluses leading to a great increase in the costs of market intervention. • EEC Regional policy was implemented in the middle of the 1970s with the establishment of the European Fund for Regional Development. At the beginning it had a very limited impact in financial terms and its EEC dimension was modest since EEC funds were only supplements of national grants decided elsewhere. These supplements were also organized through a system
Stages and dynamics of European integration 19 of national quotas. The situation changed at the beginning of the 1980s when the EEC took on a bigger role in defining regional programmes at the same time as the finance available increased. Why was this? • the concern of the Commission to extend its prerogatives; • the political necessity of offering something to the southern regions of the 10 member EEC which would be affected by increased competition following the entry of the Iberian countries; • more recently the pressure exerted by Southern European states to increase the proportion of structural funds? in the EEC budget, these states made an increase in these funds a condition for resolving the overall budget negotiations.
• International policy: As such the EEC remains a political dwarf on the international scene. Nevertheless it does have specific policies for the Third World and Mediterranean countries. The Lomé Convention defined a trading framework between the EEC and the ACP (African, Caribbean, Pacific) states. On a Mediterranean level a series of mainly trade agreements were negociated in the 1970s (and renewed since) with all the Mediterranean basin countries (with the exception of Libya and Albania).
• Industrial and technology policies. These are still fairly minor. For some years EEC industrial policy was limited to encouraging industrial restructuring by imposing financial limits on national subsidies to lame duck sectors and then setting a schedule for phasing them out in the name of respecting the laws of competition. This has been implemented in the iron and steel industry. Over recent years policies for technology have also been developed with programmes like EUREKA, FAST, etc... In fact it should be recognized that the main limit to the emergence of a Community-wide industrial policy is the free-market essence of the EEC. Defining an industrial policy with a minimum of consistency presupposes a certain socialization of investment options and the working out of the development of different productive sectors on an EEC level. At the very time that most conservative or social democratic governments are abandoning such objectives on a national level it is difficult to see how the EEC institutions are going to swim against the current. In any case the most important European companies elaborate their strategy on a world scale. Voluntarist efforts for European agreements have often met with failure. On the other hand several agreements have been directly set up with American or Japanese firms. Institutional aspects From time to time the case is made and plans drawn up for a thoroughgoing
20 International Marxist Review European political integration. Such talk has up to now led to very little actually being done. The only institutional innovation has been the direct elections to the European Parliament started in 1979. This change has not had many practical consequences since this parliament is basically a rump parliament without any real legislative powers. The Single European Act signed in 1985 will not alter this. It does confer a slightly increased power on the Commission, it extends the cases where the rule of majority decisions is applicable in the European Council of Ministers and it gives the European Parliament a few extra possibilities for amending EEC decisions (but in the last analysis it will still have no say on those decisions). All in all these modifications adjust the previous system rather than really change it significantly. In the conclusion to this article we will come back to the question of the obstacles to European political and institutional integration. The implications of the Single European Act The signing of the Single European Act in 1985 was the culmination of a process of negotiations that started at the beginning of the 1980s. It called for the generalization of the free movement of labour, commodities and capital and the removal of all restraints on competition by 1993. Its implementation has been severely restricted by the important disputes that have built up over recent years, particularly over agricultural questions, the British case, and the budget. The agricultural policy disputes have led to a series of reforms aiming to reduce the costs of subsidies by programmed price cuts and the establishment of quotas. The British case has been resolved by a form of partial compensation reducing the gap between its contributions to the EEC budget and what it gets back. The budget problems have been sorted out by increasing the revenue coming from VAT and by an agreement on limiting agricultural spending and increasing resources for the regional funds. But over and above these partial settlements the Single European Act represents a supplementary step forward in European integration. First of all it corresponds to the thinking of the dynamic forces of European capitalism that European integration was unfinished and that given the stepped up competition with US and Japanese companies the various constraints holding back a great united domestic market must be lifted. Pressure for this has particularly come from the banks and commerce/distribution sectors which are more affected by national barriers. The advanced technological companies have also pushed since they come up against differing technical norms. For all these companies a huge market of consumers is a key factor in achieving profitability. Those capital-
Stages and dynamics of European integration 21 ist sectors most committed to internationalizing their operations are most critical of the still unfinished character of Europe as an arena for the circulation of commodities and capital.
Furthermore most European political leaderships, whether conservative or social democrat, have become keen Europeans. Those political currents in favour of a certain form of nationalism, or protectionism have been defeated, or have lost their enthusiasm for their positions or have indeed modified them. This change in the political relationship of forces has been seen in all EEC countries. Of course this does not mean definitions of European integration are absolutely identical or there is no longer any national differences over it, but it does mean the policy of increased integration has become hegemonic inside the ruling classes.
We cannot here go into the detail of what is in the Single European Act or discuss its precise objectives for "perfecting" the domestic market. About 300 directives itemize the measures to be implemented — with varying schedules for:
• the free movement of commodities;
• standardization of technical norms etc;
• opening public markets to European competition;
• free movement of workers and of the liberal professions;
• establishing a common market of services and transport;
• liberalizing capital movements;
• encouraging inter-company cooperation;
• strengthening EEC discipline on state subsidies;
• harmonizing indirect taxes.
It is very illuminating to study these directives. Fundamentally they affect the freedom of exchange and of capital and only marginally concern employment rights or social legislation. This imbalance only reflects the basically capitalist nature of European integration.3 1993 is all about developing an arena for capitalist accumulation and profitability. The consequences are far from negligible.
Here we will not go into the potential effects of the restructuring of the productive system which is dealt with in Maxime Durand's article. What is important to say here is how the Single European Act will put much greater constraints on national economic policies. Clearly the harmonization of indirect taxation, the alignment of interest rates for savings*, the further limitation on state economic intervention (but also of local or regional authorities), the elimination of safeguard clauses in the commercial sector — just to take a few examples — represent a lessening of national margins of manoeuvre for
the definition and implementation of economic policies. Consequently we will be confronted with increased pressure in favour of neo-liberal policies.
There will be an objective pressure generated by the very movement of capital. Then there will be political pressure partly fuelled by a sort of catch-all, third rate Europeanist ideology which will not even adorn itself with the postwar humanist trimmings. Everything will be sacrificed on the altar of competitively and the real content of policies will no longer be discussed.
It is striking to observe how the Single European Act and the final development of the domestic market has increasingly become a substitute (including within the EEC institutions) for further integration through the working out of common social or industrial policies. The latter option cannot be accommodated within the present neo-liberal consensus. When there is a real capitalist crisis of course the reformists and planners do not last very long. This is
We can now understand why European political or institutional integration is progressing so slowly and why we are still a long way from the emergence of a European state. There is no need at all for a European state in order to create a real single domestic market. All you need is the development of the customs union and a convergence of national policies along neo-liberal lines.
To really make progress towards a European state presupposes the assertion of a European identity by other processes than the market. The state is not just a currency plus the army it is also the instrument used by social forces to ensure their control over a geographical space or the culmination of struggles for national liberation. In other words it is both a product and an agent in social and national struggles. European societies are not colonized societies dominated by an external imperialism. European nations have been historically constituted and the bourgeoisies do not at the present time need a European state in the full sense of the term neither to arrive in power nor to maintain
We might conclude from all this that the EEC is destined to regress to the stage of a free exchange zone. This forecast does not appear well-founded at the moment. In fact we could make the contrary hypothesis of a maintenance
Most states support these policies even if they do not all support the same ones or with the same zeal. The progressive build up of costs and benefits, constraints and compensations has meant that a break-up is improbable.
Indeed this is shown by the way the budget negotiations go. Furthermore an
EEC bureaucracy (in the institutional sense) has been built up on the basis of these policies and its continued existence depends on the maintenance of such
22 International Marxist Review true nationally and on a European level.
themselves in power.
and development of EEC policies.
No
1.
2.
Stages and dynamics of European integration 23 policies. At a more basic level the logic of the crisis and of international competition will not make the role of states and public policies disappear. The complex system of inter-state compromises and the regulatory role of EEC institutions functions through the implementation of EEC policies. The existence and continuation of these policies remains a condition of the political cohesion of the EEC. Between the extremes of a federal European state and regression to a stage of a simple zone of free exchange and competition what there is today is a integrated space combining the logic of commercial unification with common policies arrived at after overcoming tensions resulting from the unevenness of national situations. In conclusion we can say that capitalist Europe has developed even if it is still an unfinished process. Other social forces must mobilize to give another sense to the idea of Europe. We need to respond to the fundamental problems of our times — an answer to the economic crisis, a solution for those millions who cannot enjoy a decent standard of living because of the crisis; the ecological question and the long term future of humanity; disarmament and peace; and international solidarity for the development of oppressed peoples. None of these problems can be solved purely within the national arena.
A planned reorganization of the economy and real self-management will be impotent if just restricted to the national level. Today more than ever, given the present internationalization of the productive forces, socialism is inconceivable in a single country. At a time when the EEC has become a concrete and active dimension for the bosses' and bourgeoisies' policies, a framework that supports and legitimates them, the workers movement cannot desert this terrain without weakening itself politically and organizational. The future of the socialist struggle will depend on its ability to mobilize in this arena, to formulate proposals and to carry out struggles across Europe. Now that the ruling classes are extending and strengthening the Common Market of capital it is useful to remember something said by Rocard, today's prime minister of France, some years ago and unlikely ever to be repeated by him today:
"We have to fight against the Common Market in the name of Europe."S Notes
They benefit from export subsidies as compensation for the difference in price resulting from revaluations of their currency. Countries whose currencies are being devalued have their exports taxed. This apparent balancing out in the long term increases the distortions of competition to the extent that it does not affect imports of intermediate consumer goods coming from third countries which cost less for those countries with a strong currency. 2. The structural funds are: Regional funds, EAGGF (European Agricultural Guidance and
24 International Marxist Review
Guarantee Fund) for the financing of investment and restructuring operations and the
ESF (European Social Fund).
3.
You just have to look at statements in the White Book of the Commission on the final achievement of the common internal market to see this imbalance in black and white. For example, on social policy:
"As for the social aspects, the Commission will continue its dialogue with governments and social partners with a view to ensuring that the opportunities opened up for the achievement of the common domestic market will be accompanied by appropriate measures for meeting the objectives of the EEC in terms of employment and social security."
For example, on competition policy:
"In this context it will be particularly important that Community discipline in terms of state subsidies is rigorously applied"
On the one hand "continuing dialogue" and on the other "discipline that is rigorously applied".
Not the least of the reasons for this is to avoid flights of savings to counties with the
4.
best tax advantages.
5. From Jaumont, Negre and Rocard, The Common Market against Europe.
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19 September 1946: Zurich speech, Churchill talks of a United